More Mission Bay Commercial Land Tied Up

SAN FRANCISCO-The University of California is negotiating with Catellus Development Corp. for a long-term ground lease of 10 acres at Mission Bay entitled for one million sf of office and life science space. The imminent transaction comes on the heels of sales announced last month for land entitled for 500,000 sf of commercial space and 2,300 housing units, respectively.The University’s proposed 99-year lease of the South of Channel site is set to commence in January 2005 and includes a purchase option at year 10. The land is located immediately south of the new 43-acre UCSF Mission Bay campus. Catellus says economic terms of the transaction will be made public when the deal’s term sheet is translated into a final agreement. Local sources tell GlobeSt.com that Catellus has been asking $55 per sf of entitlement for its commercial land.Most of the entitled residential land under contract is being sold to Bosa Development California Inc. for approximately $119 million. The transaction consists of the sale of the portions of Mission Bay Blocks 2, 11, 12 and 13 that are entitled for market-rate residential units, and is structured with four closings scheduled to occur from April 2006 to April 2008. The land also includes entitlements for 40,000 sf of support retail. Another $81 million worth of residential land is under contract. Entitlements for the five parcels include residential for-sale, for-rent, and affordable housing units. These transactions are projected to close over the next 15 months. The other Mission Bay commercial space deal, for land entitled for 508,000 sf of buildings, was with publicly traded Alexandria Real Estate Equities. The transaction included Parcels 1, 3, 4, 5, 6 and 7 in Mission Bay Blocks 41, 42 and 43, which is located immediately adjacent to UCSF Mission Bay, the University of California at San Francisco’s new 43-acre biotechnology research and life science campus, and Gladstone Institute, an independent biomedical research group. Catellus’ continued sell-off of its 303-acres of entitled Mission Bay land follows the locally based company’s conversion in January to an industrial-focused REIT. According to SEC filings, Catellus’ Mission Bay land is entitled for a total of 5.4 million sf of office, 548,000 sf of retail, 3,158 units of residential and 500 hotel rooms. The book value of the land is $208.7 million, according to the filings. Assuming all the transactions mentioned in this article close, Catellus has left to sell land entitled for about 800 additional residential units.